Canada to Match US Tariffs ‘Dollar for Dollar’ as Trade Talks Collapse

Ottawa: Canadian Prime Minister Mark Carney has pledged to match US tariffs 'dollar for dollar' after negotiations between the two countries failed to produce a trade agreement ahead of Friday's midnight deadline, marking one of the most significant breaks in relations between Washington and Ottawa in recent memory.

According to reports, the two sides had appeared to be nearing consensus on lowering tariffs affecting steel, aluminium and automobiles, but the deal fell apart at the eleventh hour, with each side blaming the other for the failure.

Carney said Canadian officials had negotiated in good faith throughout, but that last-minute changes introduced by the US to its proposed terms were unfair and economically unsound, and undermined confidence in the reliability of any eventual agreement. US officials countered that it was Canada that derailed the deal by pushing for additional concessions at the final stage.

Referring to the 50 percent tariffs the US intends to impose, Carney said Canada would respond in the same way to protect its workers and businesses.

The escalating dispute raises fresh doubts about the future of the broader North American trade agreement linking the US, Canada and Mexico — a pact considered vital to industries across all three countries. Trade analysts have warned that the new tariffs could place additional strain on already vulnerable sectors, potentially resulting in job losses and business closures. The measures are expected to affect around 5 percent of Canada's total annual exports to the US.

Beyond the immediate economic consequences, the breakdown carries significant political weight given the deep economic interdependence between the two nations, which exchanged an estimated $880bn in goods and services last year, alongside extensive cross-border employment ties. Carney, whose firm stance against Trump has bolstered his popularity domestically, has said the relationship between the two countries has fundamentally shifted and that a return to previous norms is unlikely.

The tariffs were originally set to take effect at 12.01am Wednesday, but Trump had granted a three-day extension to allow negotiations to continue. Carney said his government plans to announce further support measures for Canadian workers and businesses in the coming days, stressing that Canada's negotiating objective throughout had been securing a fair agreement rather than accepting a deal at any cost or under pressure of a deadline.